The FTSE 100 is another 30 points higher in early trading, moving back above 7300 for the first time in almost a month.
- No let-up in the market rally
- TUI shares nose-dive
- UK wage growth bodes ill for consumer spending
Markets continue to clock up gains, with the signs of spring weather evidently putting traders into an optimistic mood. There are plenty of reasons to be bearish, including an earnings season that has been so-so at best, plus ongoing geopolitical turmoil and the impending return of the Greek crisis, but once again we have all been reminded of the fact that, sometimes, markets just want to go up. Last year there were plenty of voices (including me) pointing out the potential tailwinds for markets once equity inflows came back in strength, and perhaps we are seeing some of this now. Valuations are stretched, that is certain, but for now this does not seem to matter. And when the dip does arrive, it will provide another great buying opportunity. TUI’s bounce yesterday was just a flash in the pan it seems, with reality reasserting itself in impressive style. Despite the good parts of the update, earnings momentum has been decidedly weak, and with little sign of improvement the reasons to hold the stock are diminishing rapidly.
The UK data blitz continues, with today’s employment and wage figures providing a further blow to the pound. Despite more good job numbers, weakness in wage growth reinforces the message that UK households face a looming income squeeze that bodes ill for consumer spending. Retail sales later this week might hold up well, but the longer-term picture is quite bleak. Ahead of the open, we expect the Dow to start at 20,534, up 30 points from last night’s close.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.